State ex rel. Hayes Oyster Co. v. Keypoint Oyster Co.
Washington Supreme Court
391 P.2d 979 (Wash. 1964)
Coast's CEO Verne Hayes negotiated Coast's sale of oyster beds to newly formed Keypoint (defendant), which he and a Coast employee co-owned with financing from Hayes's own family oyster company, but never disclosed his and his brother Sam's financial interest in Keypoint when Coast's board (with Verne voting a majority of shares and proxies) approved the $250,000 sale; Verne later had Coast make a payment that was actually Keypoint's contractual obligation, then sold his Coast shares, and when Coast sued for the secret profits, the trial court found he had breached no duty.
Whether it is a breach of fiduciary duty for a corporate director or officer to fail to disclose a personal interest in a corporate transaction, even absent proof the transaction was otherwise unfair.